TPG Agrees to Acquire Classic Collision

Rhea-AI Summary

TPG (NASDAQ: TPG) acquires Classic Collision, a leading national collision repair operator, from New Mountain Capital. The transaction aims to leverage Classic Collision's market leadership and customer satisfaction to drive growth and innovation in the auto body repair industry.

Insights

Market Research Analyst

The acquisition of Classic Collision by TPG represents a strategic move within the alternative asset management sector, specifically in the private equity space. The collision repair industry, while not often in the limelight, is a significant component of the broader automotive service market. This acquisition underlines a trend where private equity firms are increasingly interested in service-based businesses that show resilience to economic downturns and potential for consolidation.

Classic Collision's rapid growth trajectory and extensive reach, with 262 locations across 16 states, indicate a robust operational model. This scalability is a key attraction for investors looking for portfolio diversification. The undisclosed terms of the deal do not provide a clear picture of the valuation metrics, but the emphasis on management retention suggests a smooth transition and a vote of confidence in the existing leadership.

For stakeholders, the focus should be on the potential for Classic Collision to leverage TPG's resources to further expand market share, possibly through additional acquisitions. The mention of differentiated manufacturer certifications could be indicative of a competitive edge in servicing premium and electric vehicles, a fast-growing segment of the automotive market.

Financial Analyst

In the absence of disclosed financial terms, we must look at the broader implications of TPG's acquisition of Classic Collision. The deal's impact on TPG's portfolio diversification is likely to be positive, given the stable demand for collision repair services. Furthermore, Classic Collision's strong insurance partner relationships could translate into predictable revenue streams and potentially improved bargaining power with suppliers and insurers.

Investors should monitor how TPG capitalizes on Classic Collision's operational efficiencies and whether they can maintain the company's growth momentum post-acquisition. The deal could also signal consolidation within the industry, which might affect smaller competitors and could lead to changes in market dynamics.

The strategic nature of the acquisition, particularly in the context of a growing focus on ADAS calibration and repairs for electric vehicles, suggests that TPG is positioning itself to benefit from automotive industry trends. The long-term success of this acquisition will depend on the seamless integration of Classic Collision into TPG's portfolio and the continued execution of its growth strategy.

Automotive Industry Analyst

TPG's acquisition of Classic Collision is noteworthy for its implications within the automotive repair sector. Classic Collision's emphasis on high-quality auto body repairs, ADAS calibration and the ability to service premium and electric vehicles positions the firm advantageously as automotive technology evolves. The collision repair market is highly fragmented and Classic Collision's business model, which includes a proven acquisition and integration playbook, could serve as a catalyst for further consolidation.

The existing management's continued investment in the company post-acquisition is a strong signal of their commitment to the business's future under TPG's umbrella. This is particularly important in an industry where the quality of service and customer satisfaction are paramount. TPG's operational expertise and capital could enable Classic Collision to further enhance its service offerings, invest in new technologies and expand its geographic footprint.

Stakeholders should consider the potential for increased market share in the high-margin segments of the collision repair market, such as ADAS and electric vehicles. These areas are expected to grow as vehicle technology becomes more sophisticated and Classic Collision's expertise in these areas could become a significant competitive advantage.

SAN FRANCISCO & FORT WORTH, Texas & ATLANTA--(BUSINESS WIRE)-- TPG (NASDAQ: TPG), a global alternative asset management firm, announced today that it has signed a definitive agreement to acquire Classic Collision, a leading, national collision repair multi-site operator. TPG Capital, the U.S. and European private equity platform of TPG, will acquire the business from New Mountain Capital. Classic Collision’s management team will remain invested in the company. Terms of the transaction were not disclosed.

“Today’s announcement is an exciting milestone for Classic Collision and a great testament to the strength of our team and our collective commitment to providing the highest quality service with integrity,” said Toan Nguyen, CEO of Classic Collision. “TPG shares our vision, and I believe they are the right partner to help us take Classic to its next level. I also want to thank the New Mountain team for their tremendous support as we’ve grown our platform.”

Classic Collision is one of the largest and fastest growing collision repair platforms in the U.S., servicing customers across 262 locations in 16 states nationwide. The company’s highly trained and certified team of experts use the latest equipment and techniques to perform high-quality auto body repairs and related services – such as glass repair and ADAS calibration – for all types of vehicles, including premium and electric models. With longstanding industry relationships and numerous manufacturer certifications, Classic Collision is broadly recognized as a trusted partner in comprehensive collision repair.

“Toan and his team have grown Classic into a leading collision repair platform with best-in-class customer satisfaction, strong insurance partner relationships, differentiated manufacturer certifications, and a proven acquisition and integration playbook,” said Paul Hackwell, Partner at TPG. “We are excited to partner with management to grow the company’s market leadership while continuing to empower the distinct culture and passion for problem solving that distinguishes Classic.”

“Since our initial acquisition, Classic has accelerated investments in people, operations, and innovation for the benefit of its customers. We thank Toan and the management team for a successful partnership in building a leading, national collision repair platform,” said Ricardo Gonzalez, Managing Director at New Mountain Capital. “Toan’s vision and ambitions for Classic and the future of auto body repair are differentiated, and we believe there is a bright future ahead for the business,” added Robert Mulcare, Managing Director at New Mountain Capital.

The transaction is expected to close in the second quarter of 2024. Goldman Sachs & Co LLC acted as exclusive financial advisor to Classic Collision and New Mountain Capital, and Kirkland & Ellis provided legal counsel. BofA Securities acted as financial advisor to TPG, and Debevoise & Plimpton LLP provided legal counsel.

About Classic Collision

Classic Collision was established in 1983 in Atlanta, Georgia, with a single goal: to offer quality service to its customers with integrity and honesty. We do this by employing the best talent and using the highest quality materials. Classic Collision is one of the largest privately held national providers of auto body repair services. For over 40 years, Classic Collision has put customer satisfaction first in all we do. We are proud to provide high-quality auto body repairs with properly trained technicians and the appropriate equipment. We hold numerous manufacturer certifications and factory-direct training, which makes us a leader in comprehensive collision repair.

Classic Collision is continuously looking to add new collision repair locations and automotive glass businesses to its existing network as well as expand into new markets within the U.S. If you are considering selling your business, please visit classiccollision.com/join/ and start a confidential discussion today.

For more information, to find a local Classic Collision location, and for job inquiries and careers visit http://www.ClassicCollision.com and follow Classic Collision on Facebook, Instagram, LinkedIn, Twitter, and YouTube.

About TPG

TPG is a leading global alternative asset management firm, founded in San Francisco in 1992, with $222 billion of assets under management and investment and operational teams around the world. TPG invests across a broadly diversified set of strategies, including private equity, impact, credit, real estate, and market solutions, and our unique strategy is driven by collaboration, innovation and inclusion. Our teams combine deep product and sector experience with broad capabilities and expertise to develop differentiated insights and add value for our fund investors, portfolio companies, management teams, and communities. For more information, visit www.tpg.com.

About New Mountain Capital

New Mountain Capital is a New York-based investment firm that emphasizes business building and growth, rather than debt, as it pursues long-term capital appreciation. The firm currently manages private equity, credit and net lease investment strategies with approximately $50 billion in assets under management. New Mountain seeks out what it believes to be the highest quality growth leaders in carefully selected industry sectors and then works intensively with management to build the value of these companies. For more information on New Mountain Capital, please visit https://www.newmountaincapital.com/.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240402233876/en/

Media

TPG

Courtney Power

media@tpg.com

New Mountain Capital:

Dana Gorman

H/Advisors Abernathy

dana.gorman@h-advisors.global

Source: TPG

FAQ

What is the ticker symbol for TPG?

The ticker symbol for TPG is NASDAQ: TPG.

Who is acquiring Classic Collision?

TPG, a global alternative asset management firm, is acquiring Classic Collision from New Mountain Capital.

How many locations does Classic Collision service?

Classic Collision services customers across 262 locations in 16 states nationwide.

When is the transaction expected to close?

The transaction is expected to close in the second quarter of 2024.